European stocks closed higher on Friday, but marked their worst weekly losses since the middle of March as rising US-China tensions added to concerns that a global economic downturn might be here longer than feared.
The pan-European STOXX 600 ended 0.5 percent higher, with miners rising 2.8 percent after data showed that China’s industrial production climbed by a faster-than-expected 3.9 percent last month.
European shares lost some ground by afternoon trading as Washington acted to block shipments of semiconductors to Huawei Technologies Co (華為) from global chipmakers, in an action ramping up trade tensions with China again.
Global stock markets have largely stalled this month after a solid rebound last month on fears of a possible resurgence in COVID-19 cases as countries ease restrictions and a worrying outlook from US officials on economic recovery.
The STOXX 600 recorded a 3.8 percent weekly loss, while most regional indices also saw their biggest weekly drop in two months when coronavirus-induced selling peaked.
“The market is torn between stimulus, new infections and economic data,” Keith Temperton at Tavira Securities Ltd said. “The data is bad, but the stimulus is outweighing it for now, but I don’t imagine it’s going to last.”
Europe’s semiconductor stocks took a hit in response to the latest trade comments, with Germany’s Dialog Semiconductor PLC and Siltronic AG falling 3.3 percent and 1 percent respectively.
Keeping Paris shares almost flat, chipmaker STMicroelectronics NV fell 3 percent.
An early reading of Germany’s first-quarter GDP showed that Europe’s largest economy contracted by 2.2 percent in the first quarter, its steepest slump since the 2009 financial crisis, with worse expected by mid-year.
However, eurozone finance ministers were holding a meeting by teleconference to discuss fiscal measures designed to mitigate the economic fallout.
German Minister of Finance Olaf Scholz plans a supplementary budget, which could involve taking on 100 billion euros (US$108.25 billion) in extra debt, Der Spiegel magazine reported.
Supporting market gains on Friday, German food-processing equipment maker GEA Group jumped 10 percent after reporting better-than-expected first quarter results and confirmed its forecast this year.
The UK’s biggest telecoms group BT Group PLC gained 5.4 percent after a report that it was in talks to sell a stake in its wholly owned network subsidiary, Openreach.
However, the company said the report was “inaccurate” after markets closed.
STAYING AHEAD: Fitch said that TSMC remains technologically ahead of others, but Samsung is building a new chip fab, while China is investing in its domestic industry As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said. “We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday. “By working with TSMC, US chipmakers will not face the financial burden of incremental investment
DIVERSIFICATION: Although COVID-19 would push more companies to produce in emerging markets, DBS said that it was unlikely that firms would totally leave China Geopolitical tensions and supply disruptions are expected to accelerate the migration of manufacturing out of China, as concerns about the risk of production concentrated in one country increase, S&P Global Ratings said. Although its economic expansion might be weaker than previous levels due to the accelerated relocation of manufacturing, China’s economic growth would still be stronger than that of most other economies, the ratings agency said. “While absolute growth rates will moderate, we believe China’s economic performance will continue to be a key sovereign credit support,” S&P Global Ratings credit analyst Tan Kim Eng (陳錦榮) said in a statement on Thursday. “Its growth
Taiwan’s corporate landscape has changed significantly over the past 20 years, with Hon Hai Precision Industry Co (鴻海精密) replacing Formosa Plastics Corp (台塑) as the revenue leader, while Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) has emerged as the most profitable firm, a survey of Taiwan’s 50 largest companies published on Tuesday last week showed. The Chinese-language CommonWealth Magazine survey ranked Taiwan’s 50 largest companies based on their revenue last year, and compared them with the results of a similar survey it conducted in 2000. Only 33 companies on the original list remained in this year’s rankings, the survey found, following two
Luxury hotel Mandarin Oriental Taipei (文華東方酒店) yesterday announced that it would suspend guestroom operations and lay off related staffers from Monday, as regional border controls and travel restrictions are unlikely to be lifted anytime soon. The partial shutdown would not affect the five-star hotel’s restaurants, bars, spa, and conference and banquet facilities, which this month have almost recovered to pre-pandemic levels, it said. “Mandarin Oriental Taipei will suspend all guestroom services from June 1 due to the impact of the COVID-19 pandemic,” the hotel said after four months of maintaining normal operations proved unsustainable. The change necessitates downsizing and the hotel is handling